Subway® Middle East Middle East & Africa: Keeping Pace with Growth

April 9, 2013 in Food & Drink

Across Europe the last couple of months have been dominated by negative headlines regarding supermarket meat, the food chain, quality and traceability. For a company like Subway® Middle East, stringent checking of meat supply and quality was placed at the top of the agenda many, many years ago, with quality checks coming from an in-house global set of business processes.

Subway01Subway® began life in Connecticut, USA, in 1965, but has long since evolved into a global business, built on the strengths of localised marketing and recipes – and the ambition of entrepreneurial franchisees.

The story of global expansion began in 1984, when the company opened its first Subway® restaurant outside of the USA, in Bahrain. Today the Middle East/Africa region (which also includes Pakistan and Turkey) is home to 425 restaurants in 16 countries. Overseeing operations across the area is Joseph Tabet, Regional Director:

Over the past nine years I have had the opportunity to visit every country in our region to ensure the proper growth development of the business. I work closely with a number of development agents (DAs) in the region and provide supporting guidance on a number of issues including operations, marketing and development.

The relationship between the DAs and franchisees is an integral part of the business and it is the DAs who act as the go-between for Tabet:

In every market we serve, we have DAs who by nature are independent contractors that work with us,” he states. “Each market has its own targets ranging from development to sales which the DA is responsible for. DA teams also pay a monthly visit to every store in their market to guide on marketing and operational issues reporting back to the company through a monthly evaluation system we have in place.”

Marketing is a crucial aspect of each store’s success, with the individual franchisees encouraged to push local promotion to properly address their trade area. Bigger marketing campaigns tend to come from head office in Beirut and Tabet says that across the Middle East there are certain types of media that work really well:

Our core demographic is people in the 15-34 year old bracket. Over the last 12 months we have invested heavily in marketing and the different markets across the Arab world have agreed to work together on common marketing messages. We find that for the bigger campaigns, television has been one of our biggest hits along with local newspaper and billboard advertising.

We’ve tried a lot of marketing techniques and we have kept the most effective ones. We heavily rely on social media and online marketing nowadays as we engage more with our customers rather than just sending them messages,” he explains.

Web marketing seems to work with great effect for Subway® Middle East and Tabet says that social media sites like Facebook and Twitter provide the company with the opportunity to interact with customers and better understand their needs and preferences, particularly when it comes to local flavours:

Subway03Many of the core recipes on our menu are standard across the whole Subway® world, but the great thing is that we are able to include localised, customised flavours as well. We use customer surveys to determine flavours – and local flavours are very important to us; for example, chicken Tikka is a local choice for many of our customers and therefore you would find this sandwich on our menus in some markets. We have also recently enhanced the flavour of that sandwich based on customer suggestions. Each country has its own traditional dish and the challenge is to successfully infuse those flavours.

In the US, marketing has focused around healthy eating and this has also helped to push the brand here in the Middle East.

Of course supply chain availability and quality become hugely important when the company has identified a new opportunity – and that is where Subway’s® stringent internal requirements come to the fore, as Tabet outlines:

We have a research and development team here in Beirut, which performs tests to maintain a high quality product. Our main protein suppliers are in Jordan and Saudi Arabia and we will regularly visit their sites to ensure our strict standards of quality are met.

In addition we also send meat to a central testing area in the US, where it is analysed for things like fat content.

Within the stores, the DAs regularly check that the franchisees are complying with our high operational standards and should a store fall below these this is reported back. We will of course aim to provide assistance but if the store continues to fail we will ultimately take legal action.

Of course where there are issues at a store that could affect food hygiene and safety (such as a broken freezer), we expect the franchisee to immediately contact the service providers to fix the issue – all of the maintenance is carried out by third party companies who supply all of our store equipment.”
Since February 2011, Subway® Middle East’s distribution and supply chain management has been operated by Middle East Independent Purchasing Company (MEIPC), which was formed through a number of franchisees. They manage the supply chain, working with distributors and logistics companies and of course the franchisees on stock orders.

MEIPC collect information and data on consumption and use this to create forecasts for future distribution which helps us to better manage stock” Tabet states.

Seasonality can add a challenge for MEIPC; of course the Subway® sandwich may be on the menu all year round, but ingredients likes tomato and lettuce are dependent on suitable weather conditions which can affect availability and potentially quality.

Tabet indicates that overall there are approximately 3,500 Subway® staff in the area, with online training now offered in several languages. At present the company is working to provide these training facilities in Arabic and Turkish, with topics including sandwich artistry, hygiene and customer service.
Because Subway® does not cook any ingredients the size of a store can vary, meaning there could be one around any corner. A Subway® restaurant can fit into an 18 metre square area – and across the Middle East, the business operates in all kinds of venues including hospitals, stadium, amusement parks, airports, shopping malls and office buildings.

Tabet says that growth continues to be slow but steady, with Subway® Middle East now the leader in the UAE with 150 stores and also the leading Quick Service Restaurant (QSR) in Kuwait. The next big area of opportunity could be Qatar, where there is an enormous amount of construction industry creating new cities – but also inhabited by lots of ex-patriots who are of course very familiar with the Subway® brand.

At present the company has 20 stores in Qatar but that number is set to grow, particularly with the Fifa World Cup (TM) heading to the country a few years from now.

For this year we hope to increase our number of restaurants to 600 across the whole region,” says Tabet. “We will be opening stores in new countries like Kenya, where our first store is currently under construction – and also Djibouti, Morocco and Mauritius.

Our focus will be on increasing franchisee financial profitability and we will work closely with the franchises to ensure we are delivering value to the customer, which will help to increase sales. The challenge will then be to ensure our suppliers can keep up with demand and we will look to bring some new suppliers on board if they are unable to cope with the extra load,” he concludes.